Ebook: Services in Switzerland: Structure, Performance, and Implications of European Economic Integration

by RolfM. Jeker, Federal Office for Foreign Economic Affairs Services have only quite recently become an important issue in foreign economic policy and particularly in international trade negotiations. Trade policy was traditionally perceived to deal almost exclusively with exports and imports of goods. The increasing importance of services both nationally and internationally is, mainly, due to the gains in agricultural and industrial productiv­ ity (freeing resources for services activities), and the progress in communication technology, facilitating trade in invisibles. Notable examples of contractual and legal frameworks for services in international trade relations are the internal market program of the European Community extended by the Agreement on the European Economic Are. a (EEA) to EFTA countries, the multi­ lateral Uruguay-Round negotiations under the auspices of the GATT on a General Agreement on Trade in Services (GATS), and the North American Free Trade Agreement (NAFTA) signed by the United States, Canada and Mexico. This trend is of particular significance to Switzerland, a country where services contribute about 65% to the value added of the economy, a share which will probably still increase somewhat. Ser­ vices also contribute to an important extent to the traditional surplus in the current account of the Swiss balance of payments. Switzerland clearly has comparative advantages in the field of ser­ vices, as is well demonstrated by its long and successful tradition in key services sectors like banking, insurance, tourism, consulting and engineering.

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This book is a journey in largely uncharted territory. It derives from a concerted effort, commissioned by the Swiss Federal Office for Foreign Economic Affairs, to gather comparable information on eight service industries of a country where statistical information about the services sector is particularly scarce. The book is also unique in that it provides the international reader with detailed descriptions of the regulatory framework governing these service industries and relating them totheir current and future expected performance. Special attention is paid to the issue of returns to scale, which are considered crucial in the enlarged market created by the "EC 92" initiative. Applying the tool of DataEnvelopment Analysis where the data permit, it is found however that large service firms seem to have already exploited existing returns to scale. In all, this book constitutes a valuable reference to anyone attempting to asses the future outlook of services in a small open economy that for some time in the future is likely to remain outside the European Community.